WOW – UBS rates the stock as Buy

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The highlight of Woolworths’ quarterly sales numbers was a 4.2% increase in food sales, Easter adjusted, versus Coles ((COL)) at 2.4%. Overall sales growth beat the broker by 1%. Other businesses performed well, even Big W, but Big W guidance is unchanged, which disappoints the broker given the restructuring underway.

That restructure, and capital management, had underpinned the broker’s Buy call. That call is now “under review”, with the stock now trading at a 22x FY20 multiple. Target unchanged at $30.80.

Sector: Food & Staples Retailing.

Target price is $30.80.Current Price is $32.58. Difference: ($1.78) – (brackets indicate current price is over target). If WOW meets the UBS target it will return approximately -6% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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